Correlation Between Columbia Minnesota and Ab Minnesota
Can any of the company-specific risk be diversified away by investing in both Columbia Minnesota and Ab Minnesota at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Columbia Minnesota and Ab Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Minnesota Tax Exempt and Ab Minnesota Portfolio, you can compare the effects of market volatilities on Columbia Minnesota and Ab Minnesota and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Columbia Minnesota with a short position of Ab Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Minnesota and Ab Minnesota.
Diversification Opportunities for Columbia Minnesota and Ab Minnesota
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Columbia and AMNAX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Minnesota Tax Exempt and Ab Minnesota Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Minnesota Portfolio and Columbia Minnesota is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Columbia Minnesota Tax Exempt are associated (or correlated) with Ab Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Minnesota Portfolio has no effect on the direction of Columbia Minnesota i.e., Columbia Minnesota and Ab Minnesota go up and down completely randomly.
Pair Corralation between Columbia Minnesota and Ab Minnesota
Assuming the 90 days horizon Columbia Minnesota Tax Exempt is expected to generate 1.46 times more return on investment than Ab Minnesota. However, Columbia Minnesota is 1.46 times more volatile than Ab Minnesota Portfolio. It trades about 0.2 of its potential returns per unit of risk. Ab Minnesota Portfolio is currently generating about 0.19 per unit of risk. If you would invest 1,971 in Columbia Minnesota Tax Exempt on September 4, 2024 and sell it today you would earn a total of 33.00 from holding Columbia Minnesota Tax Exempt or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Columbia Minnesota Tax Exempt vs. Ab Minnesota Portfolio
Performance |
| Timeline |
| Columbia Minnesota Tax |
| Ab Minnesota Portfolio |
Columbia Minnesota and Ab Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Minnesota and Ab Minnesota
The main advantage of trading using opposite Columbia Minnesota and Ab Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Minnesota position performs unexpectedly, Ab Minnesota can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ab Minnesota will offset losses from the drop in Ab Minnesota's long position.| Columbia Minnesota vs. Columbia Porate Income | Columbia Minnesota vs. Columbia Ultra Short | Columbia Minnesota vs. Columbia Ultra Short | Columbia Minnesota vs. Columbia Treasury Index |
| Ab Minnesota vs. Goldman Sachs Managed | Ab Minnesota vs. Ab Bond Inflation | Ab Minnesota vs. Inflation Protected Bond Fund | Ab Minnesota vs. Arrow Managed Futures |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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